Conceptual Framework

Question 1

Fundamental Characteristics?

Answer 1

1. Relevance

2. Faithful Representation

Question 2

Relevance Characteristics?

Answer 2

1. Predictive Value
2. Confirmatory Value
3. Materiality

Question 3

Faithful Represention characteristics?

Answer 3

• Substance over form
  1. Completeness
  2. Neutrality - Fair and not bias
  3. Prudence - exercise of caution when making judgements under conditions of uncertainty
  4. Freefom from error

Question 4

Enhancing Characteristics?

Answer 4

1. Comparability - Understand similarities and differences
2. Verifiability - Confirmation of event or amount
3. Timeliness - in time for decision making
4. Understandability - Makes sense

Question 5

Definition of materiality?

Answer 5

Information is material if omitting it or misstaing it could influence decisions

Question 6

Factors in determining materiality

Answer 6

1. Needs to be considered in the primary financial statements as a whole
2. Judgment to applied whether information could reasonably affected users.
3. Based on qualitative and quantitative factors